The Western Cape enjoys a higher per household income which in turn increases affordability of property in the province in spite of higher property prices. This is according to research published in the recent FNB Property Barometer – Western Cape Residential Property Review.
This review places the Western Cape just behind Gauteng when it comes to real estate affordability, while Kwazulu Natal and the Eastern Cape lag in third and fourth places in spite of lower proper prices and values in these provinces. “While these statements are confusing at face value, the research behind them should probably be interpreted as a trend, rather than a statement of actuality,” says Mike Greeff, CEO of Greeff Properties, an exclusive Affiliate of Christie’s International Real Estate.
“The figures show that the average Western Cape household enjoys a higher than average income than the three other provinces reviewed, however the irony here is that this is more likely to be the case because there are a greater number of income earners per household, as young adults are continuing to live with their parents longer than was the case in previous generations. They stay because they cannot afford to buy property for themselves since properties are indeed more expensive in the Western Cape,” explains Greeff.
He says the survey also cements the fact that the geographic features of the Western Cape such as oceanic boundaries and intersecting mountain ranges make for a scarcity of options to spread out and develop new properties, unlike in Gauteng which has undergone what the survey refers to as “urban sprawl”. “The fact is, there are more people living in the Western Cape than current real estate availability can cater for, and this also puts the province’s property at a premium,” says Greeff.
“With regard to the conclusions drawn from this survey, the more relevant point is that properties in the Western Cape do attract a higher value on average than those in many other provinces in the country and have historically always done so, which bodes well for those who own real estate in the province as well as those who can indeed afford to invest in property,” says Greeff.